France slaps Euro 7.2 bn tax hike on rich, companies

July 4, 2012 - 17:54 AMT

PanARMENIAN.Net - France's new Socialist government announced a raft of tax rises worth 7.2 billions euros on Wednesday, July 4 including heavy one-off levies on wealthy households and big corporations, to plug a revenue shortfall this year from feeble economic growth, Reuters said.

A one-off levy of 2.3 billion euros ($2.90 billion) on those with net wealth of more than 1.3 million euros and 1.1 billion euros in extraordinary taxes on large banks and on energy firms holding oil stocks were central parts of an amended 2012 budget presented to parliament ahead of a vote later in July.

The measures, in line with President Francois Hollande's election campaign pledges, should be approved without hitches given the Socialists' clear majority in parliament.

Hollande, in power since mid-May, says the rich should pay their share as France battles to cut its public deficit from 5.2 percent of GDP last year to within 4.5 percent this year and 3 percent in 2013 despite a stagnant economy and rising debt.

The new budget followed a grim assessment of public finances on Monday by the state auditor, which warned that 6-10 billion euros of deficit cuts were needed in 2012 and a hefty 33 billion euros in 2013 if France was to achieve its deficit goals and avoid the risk of a spiral in public debt.